tv Your Business MSNBC July 13, 2014 4:30am-5:01am PDT
franchise a small business or part of a big corporation that's being debated as seeltd plans to raise the minimum wage. this entrepreneur decided to partner with big brands moms trust. that and more coming up next on "your business." announcer: small businesses are revitalizing the economy. american express open is proud
to help. that's why we are proud to show "your business" on msnbc. ♪ hi, there, everyone. i'm j.j. ramberg. welcome to "your business" where we address the needs of america's small businesses. attempts to raise the minimum wage across the country have franchises up in arms. many say they are not small businesses. seattle raised the minimum wage there to $15 an hour. that is a 61% increase. the law gives small businesses seven years to comply. franchises have to comply within three years because the law claims they are really big businesses with ties to big corporations. similar laws are being considered in chicago and boston, philadelphia and san francisco.
stephen caldeira is president and ceo of the international association that is seeking to overturn the seattle law saying they treat franchises unequality. makina howell is with the main street alliance. she's been the leader in getting the seattle minimum wage bill pass zed. great to see you guys. >> great to be back on, j.j., thank you. >> thank you. >> i want to step back a moment from the franchise, is it a big business or small business and talk about raising the minimum wage. makini, you worked hard to get this bill passed. why is it so important? >> i always believed in raising the minimum wage. we need a living wage. $9 an hour is not a living wage, neither is $7 or $2, the federal tip wage. none of us here sitting here debating this would accept that.
it boosts the economy. with the raise of the wage in seattle, putting $3 billion more into low wage workers pockets. that goes to the sneaker shop down the street or my restaurant. that goes directly to small business owners bottom line. >> stephen, the franchise issue aside, what do your constituents think about the minimum wage raise zing. >> first and foremost, it's important to remember the minimum wage was never intended to be a living wage. it was meant to be a floor. it was entry level workers, lesser skilled positions. because of the downward pressure on the economy, it has put the franchise industry and the quick service restaurant industry in a duff place because people coming out of college or people out of a job can't get the job they want and/or get a job at the salary they are used to making.
it's putting downward pressure on the economy. we have to remember, the franchise industry works on thin profit margins. >> let's get to the franchise issue. why do you think they are being treated unfairly in this? >> in seattle, the city council passed unanimously, 9-0 and the mayor subsequently signed that bill that would bring the minimum wage from the current $9.25 an hour, excuse me, $9.32 an hour in seattle up to $15 over seven years if you are a small business with under 500 employees. if you have over 500 employees, it takes you three years to get there. however, they lumped franchises in with the larger businesses even though they have under 500 employees. if i'm a subway on this side of the street with 10, 15,
employees and i'm a non-franchise across the street with 15 employees, i get seven years. if i'm a subway, i get three years to phase in to get up to $15. that's going to be a tough slide for folks that create a lot of jobs. >> makini walk me through the process of making franchises big corporations. >> it's -- j.j., it's unconchable for a big business to hide behind them. it's a fundamentally different business model. you get corporate support to create your menu and store front. you get corporate support on staffing and staffing levels. when you have a small business, you create your own menu and staff and your own marketing and promotions. you build your business from the bottom up. so, you can't really compare a small business to a
multinational corporation like a mcdonalds that supports it franchises and say they are fundamentally the same thing. to be perfectly honest, the franchises share the same association. they are tighter tied than stephen is making it sound. it's a fundmental different business model. i think they can get there quicker. >> based on what makini is saying, shouldn't there be support from the mothership, shouldn't there be to get them through this period quick sner. >> look, i think it's important to understand that not unlike makini who put her own skin in the game, her own financial resources and effort to build plum restaurants, these small ind pendant owners have put in their life savings, their investment savings or taken out
a loan or in some cases all three to pay an initial franchise fee to a franchise company and make ongoing royalty payments for use of the trademark to license the brand. by the way, declared by the board, the federal trade commission and several state laws around the country. >> unfortunately, we have to end it there. it will be interesting to see how it plays out in cities across the country. i thank you both for explaining both sides of the issues. thanks for joining us. >> thank you. >> thank you. having a great idea gets you part of the way to having a great business, but not all of the way. as the new kid on the block, it can be hard to get people to try out your service. i recently went to california to speak to the owner of a baby business who figured out partnering with big names brought her instant credibility and customers. ♪
>> it's a tuesday afternoon at this high traffic whole foods in california. right near the entrance, in this prime real estate, there's a tent set up where moms and dads can get their kids car seats cleaned. >> i think the partnerships have taken my brand to the next level. >> jennifer is the founder of clean bee baby. an ecofriendly clenner for car seats and strollers. whole foods is a boom. >> they provide the space and electricity and provide marketing. >> jennifer founded the company after seeing her sister and mom friends struggle with and often ignored they are getting grosser by the day car seats. she saw a true need in the market. but, while moms were excited about the idea, investors weren't as exuberant. >> they thought the idea was niche or not sexy, high-tech
business like they were typically invested in. >> she was left with a dilemma. with no marketing budget, how would see find customers? how many cold e-mails? >> thousands. no, probably in the hundreds for sure. >> she came up with a plan. she needed to build trust. the best way to do that was to partner with brands moms already knew and loved. basically, get a stamp of approval that would shortcut the sales process. >> it was important to try and borrow brand credibility from established brands so that, you know, an unknown brand like clean bee baby will be able to get moms to listen and hopefully try and pay for our service. >> stephanie is the owner of pump station. jennifer offered to do a free day of cleaning in their parking lot for customers. >> our moms were intrigued.
>> through the early events, jennifer learned something unexpected. she was bringing as much value to her partners as they were bringing to her. moms wanted the service. while their car seats were getting cleaned, they needed something to occupy their time. >> while they drop off their strollers, check out our store and shop around. we offer them a 20% discount. >> some of our retail partners see 44% growth in sales on the days of our events. >> it wasn't just retailers. she contacted the children's hospital in los angeles that lends out car seats. if she could say she worked with them, parents would know she has a safe service. getting the hospital staff to take a chance on her was all about developing a relationship. >> my team felt she was good people. she seemed down to earth and would make it happen in a real way. >> i had to prove myself and the company through doing a lot of
free cleanings for them and proving we delivered the quality and level of service they required. before i approached them and said can i start using your logo on marketing. >> jennifer was off to a good start. then, the honest company called and offered to supply jennifer with all the cleaning products for free. >> i love the honest company. they make the safest, most effective products for my family. >> they spent a lot on marketing. tv commercials, jessica alba is a co-founder. does that then stretch out to you guys? do you feel the effects of their branding? >> absolutely. they will post about us on social media and through their blog. they speak about us. >> all of these relationships make all the difference to customers like danielle. >> i know that the products are safe. i know that there's a guarantee
behind them. that is such a reassurance. to know children's hospital recognizes the safety efforts of clean bee baby. it's a total stamp of approval. peace of mind. >> after proving her concept, she started going after partnerships with the bigger brands, whole foods, babies are us, nordstroms. with them putting up posters advertising clean bee baby at their locations, they have developed a stronger reputation. >> whole foods is restrictive in who they partner with. it's got to be ecofriendly and clean. it augustmenments the brand. >> clean bee baby has more demand than they can respond to. jennifer is fixing that. investors are no longer a problem. she proved the company works and raise zed $500,000 for more.
with up to 15% of the sales sites coming from mobile, it is time to get your site up to date if it's not ready. here are five ways to boost mobile conversion rates. one, build it right. optimize the website to match what you are trying to accomplish. it should take no more than two clicks to reach anywhere on the site and make sure the search box is displayed prominently. two, build with mobile features in mind. for example, use the gps built into the smartphone to estimate shipping costs or qr code reade readers. three, use e-mail capture forms. they should be large with buttons that are at least 40 pixels. eliminate typing wherever possible and offer options via a drop-down. be personal. five, encourage sharing. images and videos are social
proof that your customers like and use your service or product. getting the word out is a natural part of the user experience. we have more great advice coming up as we and your questions on key met tricks to keep your eyes on and get your employees to treat your brand with respect. i go up, up and away to find out what this hot air balloon company did to rise above their competition. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone.
there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. one of my guiding principles, i want everyone to be a difference maker versus a caretaker. i want people to feel they can influence the department they are running or working in. if they are just there kind of being a caretaker and doing whatever someone did before, just kind of doing the same thing, they are not thinking enough passion. >> as we saw with clean bee baby, it can be difficult to make your product or service stand out from the rest. a hot air balloon company had to figure out how they were going to beat their competition to achieve sky high profits. look up in the sky on any clear
morning in california's napa valley and this is what you see. hot air balloons flying high above, dotting the sky with their colorful canvases. these balloons seem indistinguishable. the pilots and owners know exactly who is who. >> those with balloons are bee and napa valley balloons. >> they founded their company above the west in 1979 and started working at it full time soon after. >> i used to have a real job. then after the merger and acquisition, pay too much, or know too much, you get fired. >> when they began, there wasn't much competition, only one other company. today, there are six. any tourist looking to book a ride can find flyers that don't look that different from each
other. carol ann works at making above the west stand out. >> it's one of the hardest things to do from a marketing point of view. >> they decided they were not going to compete on price. that was just a losing battle. >> we realized if we lowered our five $5, they lower theirs five. >> the problem with having price be the only thing that distingish wishes you, they will always be someone less. >> they charge a flat, non-gauchable rate, doing things differently than the competition. >> they are able to move under us with their stated price, then they discount under that to get more people. >> they say the pricing may turn off some people, but those aren't the customers they are after. >> the passengers that come with us, i think they are more interested in value than in price. >> because of the high prices,
they are able to offer a more customized experience, taking up fewer passengers, one trip per balloon a day, which limited waiting time. shirley quick is the manager of a high end hotel nearby. >> we feel confident when we recommend their company. they are going to get the same level of service they would get from us. >> all of these choices, the pricing, the limited rides limited their ability to grow their company. >> where we decide to get really big, we would have to change what we do. we are the size we are because we want to be the size we are. we think that's the best way to offer really excellent experience to our passengers. >> that said, care ann admits there are times they look across the sky and have a moment of wondering. >> sometimes you do look at someone else who maybe is flying
more people and think, gosh, they're, you know, maybe we should do what they do. >> then she says she comes back to her senses. you have to think long term. there's a lot of short term marketing strategies that could change things for you a little bit, but then have consequences for you in the long run. >> knowing that you have a strategy that you are going to stick to gives you time to focus on what this is really all about. >> i enjoy it. i enjoy it. it's time to answer some of your business questions. let's get our board of directors in here. kimberly weisul is co-founder and editor of one thing new, digital media start up, rebooting women's contact. carol roth is a contributor at cnbc, a former banker and invester. thanks for being here.
>> always. >> good to see you. >> let's get to the questions. the first one is about the importance of your brand. >> as a solo entrepreneur, one thing i have a hard time with i employees to protect my brand which is actually my name. how do i find other employees that can represent myself me as the way i would myself? >> we've done this story before because it's so hard. people want you. you're the person. how do you get people to replicate you, which they can't. represent you? >> absent cloning, i think the challenge that you have to face is most people hire for skills, and i advocate hiring for values. so you can find someone with great shared values, character, work ethic i.'s very easy to teach somebody most skills. it's very difficult to teach somebody to care. i think i would refocus around the way that you're hiring and
also be really clear about your value proposition so they're communicating the brand in the way you want them to. >> it's interesting, too, because you have to create this baby and let him or her go and put their own spin on it, too. >> a business owner may be surprised at how much very detail oriented training is happening. i've spoken to business owners and they found that when they sent those new people out to clients, they had to be very, very precise about, you cannot text. this is the way we introduce ourselves. when we write e-mails to clients, if it's a monday, it starts how is your weekend, just very granular things but that make it seems as if it's all one company, we care in the same way, we're all on the same team. >> there's a balance between that. you want to be very clear but you want to give people the latitude to be able to make common sense decisions. i feel like sthims when there's over training and something goes off script which happens all the
time in small business, a lot of times the employee fumbles the ball so to speak because they're not sure what exactly to do. >> the last question is about plotting your growth. >> what are your key metrics you feel are critical for a business owner to keep their eye on for building effectively. >> good for her for asking. too many people don't pay attention at all. >> metrics, loif metrics. every industry has ones that are specific. i think everyone knows to take a look at revenue growth. i think ones that get past entrepreneurs are profit margin, not just dollars, but percentage, after your cost of good sold, percentage of revenue, what do you have left over to cover your other expenses. you have to make sure your profit margins are high enough so you're covering your expenses in a way you can go down to your profit margin which is what you have at the end of the day. i think a lot of the challenge is the entrepreneurs don't know where to go for this information. one of my suggests is go look at
public company filings. even though they're bigger business, it gives you a sense of industry benchmarks. if you're a restaurant company or service business, you can understand what a growth margin might look like or what a profit margin might look like and compare it to your business and give it a good goal. >> i would ask business owners to dig deeper and think about cost accounting. most business owners are bad at this, don't know how it works. if you're selling cookies and you're making them, renting space in a commercial kitchen, you know what it costs you to make them. you know what your buy is paying. but when you start wholesaling, that all changes. when you open up another location in another city, your costs change again. you may be very profitable in one location or with one product line and you may be losing money in another. that may all be like a big mush when you get to your actual bottom line, you need to know
the cost and profits of every single thing you're doing and where you're doing it to build for the kind of growth she's talking about. >> depending on your business, look at efficiency numbers. how many customer service e-mails are you getting through per hour. how many this are you getting through per day. that will also tell you which are the good economy employees and which ones should go. >> also attrition. if you have a revolving door, you have other problems to address as well. >> so great to pick your brains. thank you for stopping by on this. if any of you out there have a question for our experts, we answer them here on the show every single week. head over to our website. the address is openforum.com/yourbusiness. once you get there hit the "ask the show" link to submit a question for the panel. it's openforum.com/yourbusiness or you can send us an e-mail, the address is
firstname.lastname@example.org. we're always checking out social media for new ideas and motivation from social entrepreneurs out there. small business expert and u.s.a. today columnist ronda abrams tweets in the u.s. 49% of business prospects turn into sales with in-person interactions, but only 32% without. business coach jerry quinn says the more emotionally connecting experiences you create for customers, the more coins you put in the piggy bank of customer loyalty. here is someone you should follow on twitter. carol roth tweeted i just had to explain to someone that i have a very difficult time with business monogamy. you're always doing so many things. >> i call it focused add. i'm folk good at focusing on things. i'm bad at making commitments. i've been married for 15 years.
a that's the only one long-term commitment i've ever made in my entire life. i'm out there with all the different businesses. >> by the way, you started a business and you also write for "inc." i have a business. i'm here. if you're like most entrepreneurs, your smart phone and lab top are probably two things you absolutely need to run your business. so we talked to some small business owners about what online tools and apps they can't live without. >> i use pro prompter because i'm starting to do a number of videos for internet marketing. it's a very simple teleprompter where you can hook up with an ipad and iphone and do a very nice video. >> i love flipogram because you can tell the story of what you're doing, add it to music and convey all your products and services to somebody in a quick fun way and you can send it on social media or web mail.
>> the website i love is event bright because i'm able to sell tickets to my trainings and being able to check people in off my phone. i can provide my services. >> we love send out cards. it allows us the opportunity to reach our clients in a high touch way because they allow us to create cards and send gifts and really mow vied a little motivation for our stew departments when they're doing the things we want them to do. it's very ought moated, so it makes me look like we're touching them at the time that is important to them. >> an app i like in contact sync, it allows you to sync your google contents with your phone or macaddress book. you don't have to go to gookal when you're using your phone. >> great app is appointment
core. it's an app we use to schedule appointments onto our google calendar automatically for us. so when leads come in, we can schedule those -- they can schedule themselves and one of our salespeople will call them in. >> it is for text messaging. they have landing pages totally optimized. it can be done with a fantastic app for small businesses on a small budget. >> thanks everyone so much for joining us today. if you want to see any of these pieces again, we've posted them on our website. it's openforum.com/yourbusiness. you'll find all of today's segments plus web exclusive content with more information to help your business grow. you can follow us on twitter. it's @msnbcyourbiz. next week the oerns of a plumbing and heating business
combat owner burnout with a new business philosophy. >> we started looking at models like nordstrom's, disney, zap pose. if we can take these belief systems they have and put it into our company and know one else could company that. we would be really unique. >> find out how they rebuilt the company to last by having a sharp focus on customer and employee satisfaction. until then, i'm j.j. ramberg. remember, we make your business our business. if i can impart one lesson to a new business owner, it would be one thing i've learned is my philosophy is real simple american express open forum is an on-line community, that helps our members connect and share ideas to make smart business decisions. if you mess up, fess up. be your partners best partner. we built it for our members, but it's open for everyone.
there's not one way to do something. no details too small. american express open forum. this is what membership is. this is what membership does. how would you cope with 52,000 unexpected house guests? good morning. thanks forgetting up early to start your sunday with us. i'm jonathan capehart in for steve kornacki. there are a lot of stories to get to this morning. we want to get started with the humanitarian crisis stim unfolding along the u.s. border with mexico. we've seen what it looks like when huge numbers of people flee their homes and show up somewhere else. this is a refugee camp in iraq housing people trying to escape the recent violence to the so